An increase in the demand for HDTV sets leads to an increase in demand for LCD and LED TV screens. This situation arises because:
A. LCD and LED screens minimize the costs of production
B. The supply of LCD and LED screens has decreased
C. The demand for LCD and LED screens is a derived demand
D. Of foreign production of LCD and LED screens
C. The demand for LCD and LED screens is a derived demand
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The government can continuously issue new bonds to pay the interest on its outstanding bonds so long as
A) the real GDP growth rate exceeds the real interest rate. B) the real interest rate exceeds the real GDP growth rate. C) the real interest rate exceeds the nominal interest rate. D) the nominal interest rate exceeds the cost of borrowing.
The proponents of rational expectations believe that:
A. there will be a substantial time lag before people anticipate the eventual effects of a shift to a more expansionary macro-policy. B. macro-policies that stimulate demand and place upward pressure on the general level if prices will temporarily increase output and employment. C. the inflationary side effects of expansionary policies will be anticipated quickly, and therefore, even their short-run effects on real output and employment will be minimal. D. discretionary changes in macro-policy can be made in a manner that will reduce the economic ups and downs of a market economy.